Changes to Social Security


Recently, the President signed into law the Bipartisan Budget Act of 2015.

Of particular significance to retirees and those preparing for retirement is the section of the act dealing with the closure of perceived loopholes within Social Security rules and benefit election options.

How this may impact people filing for Social Security benefits:

  1. No one will be able to implement a “file and suspend” strategy after 6 months from the act being passed.
  2. If someone has already claimed benefits using a file and suspend strategy, they will be “grandfathered” in, and may continue receiving benefits as they are now.

“File and Suspend” Defined

The “file and suspend” has become a popular benefit election option. It helps many married couples by allowing one of them to take advantage of spousal benefits while the other continues to let their retirement benefits grow.

Under current law a spouse cannot claim a spousal benefit unless the main beneficiary claims benefits first. However, once full retirement age (FRA) is reached, a beneficiary can file for benefits and then immediately suspend those benefits until a future date. By doing this, the spouse can claim a spousal benefit and the main beneficiary can let their own retirement benefit continue to grow.

Under the new Bipartisan Budget Act of 2015 legislation, the “file and suspend” option will be removed.

These changes may play a role in your retirement strategy. We are working to stay on top of how these changes may impact our clients. If you would like a complementary review of your specific situation, please give us a call at (877) 692-6800.